Welcome to the Shroomery Message Board! You are experiencing a small sample of what the site has to offer. Please login or register to post messages and view our exclusive members-only content. You'll gain access to additional forums, file attachments, board customizations, encrypted private messages, and much more!

There're alot of posts dealing with the history and status of money in the US. Here's what I understand, having done a little research. Please point out any mistakes I make.

Coins and bills are handled separately.

Coins are minted by the treasury. When a Federal reserve branch wants coins, they transfer money to the treasury's account in an amount equal to the coins to be delivered. Any difference between the cost of minting the coins and their value ends up as revenue for the federal government (US mint). Circulating coin revenue is around 250-300 million dollars/year.

When the federal reserve (New york) wants bills, they pay the Bureau of engraving (Dept. Treas.) for the cost of printing the bills. They are required to have resources equal to the face value of bills in circulation - ie. bills are a liability for the federal reserve, and by law must be backed by other assets. There are basically three types of resources backing the circulating bills: federal debt, gold certificates, and SDR certificates. Gold certificates are claims on US gold reserves held by the US Mint. SDR (special drawing rights) is an international currency basket for governments, composed of certain amounts of dollars, euros, yen, pounds, etc.By far the largest single resource held by the federal reserve against circulating currency is federal debt - T-bills, certificates, and bonds.The total value of all bills in circulation is around $750 billion.

I'm not sure what conclusions to draw from this yet, but it's not quite the same thing as previous fiat currencies. The difference is the requirement that the federal reserve have assets equal ling the total value of all bills in circulation. This prevents the arbitrary printing of money, to finance a war or what have you - which was always the downfall of fiat currencies.

Quote:I believe that banking institutions are more dangerous to our liberties than standing armies . . . If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] . . . will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered . . . The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.

--------------------It is better to be hated for what you are than to be loved for what you are not. -Andre Gide

"Generosity is nothing else than a craze to possess. All which I abandon, all which I give, I enjoy in a higher manner through the fact that I give it away. To give is to enjoy possessively the object which one gives."

The Federal Reserve system is fairly unique, and unlike the systems that Jefferson was familiar with. It might be a problem, and Jefferson might disapprove - but it's not what he was referring to in that quote.

If I'm being robbed, I want to know how, so I know what to do about it.

There are 12 regional Reserve Banks. These banks are "owned" by member banks - if a bank wants to participate in the Federal Reserve System, it has to buy a share of stock in the appropriate Reserve Bank. Stock in a Reserve Bank pays 6% dividend (by law), and cannot be used as security for any debt.

Any profits that a Reserve Bank makes beyond it's operating expenses are returned to the federal government - they mostly come from interest payments on the federal debt used to secure currency.

Finally, Reserve Bank stock ownership doesn't give much influence over the functioning of the Federal Reserve. The seven members of the Board of Governors of the Federal Reserve are appointed by the President and confirmed by Congress. Member banks do have significant influence, but not total control, over the selection of the Board of Directors for their regional Reserve Bank. You can read about that here: http://www.federalreserve.gov/pubs/frseries/frseri4.htm

So, the banks own the Reserve Bank stock, and whoever owns the banks owns most of the Reserve Bank stock.But it just doesn't much matter who owns the Reserve Banks. The government appoints their governors, and their profits go to the government.